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McDonalds, Starbucks, Subway rank as biggest chain restaurants

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STACEY VANEK SMITH: Starbucks will report earnings a little later today. The coffee giant is expected to do well in part because of price hikes on its coffee drinks. And yes, I’ve noticed. But its not just macchiatos and Americanos bringing up the bottom line for Starbucks. It’s the food. Starbucks and Subway now rank just behind McDonald’s as the biggest chain restaurants in the country.

Darren Tristano is with food industry analysis group Technomic he helped compile the list. Good morning, Darren.

DARREN TRISTANO: Good morning.

SMITH: Starbucks appears to be gaining on McDonalds, but I mean are they really on the same level?

TRISTANO: They’re definitely gaining momentum. A big part of this has to do with two things. First, the healthy perception consumers have of different products they see — like a Subway and Starbucks — which gives them the perception that it’s better for you. The other is that the coffee has really driven not only Starbucks but now Subway because of their breakfast offerings. Premium coffee specifically resonates with younger consumers and brands like Starbucks have become a symbol of status.

SMITH: Now, Burger King and Wendy’s rounded out the top three for what seems like forever. Can they get back in the top three?

TRISTANO: Burger King and Wendy’s have run into some struggles. Part of the issue with them is they’ve gone through some ownership changes. They’ve been public companies which has been difficult as well. And as a result, they’ve found it harder to compete with the McDonalds of the world, as well as what we’re seeing in the better burger segment with fast, casual giants like Five Guys Burgers and Fries really coming up the ranks and kind of chomping at their heels in terms of the burger market and what they’re able to offer.

SMITH: So Frosties out, Frappacinos in?

TRISTANO: I think so. Burger King is struggling to compete with McDonalds and losing share to chains like Subway and Starbucks so it’s really becoming the shift and share from McDonalds and Wendys and Burger King toward these chains. But McDonalds is definitely the clear winner of these five.

SMITH: Darren Tristano of Technomic, thank you so much.

TRISTANO: You’re welcome thank you.

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